Bangalore District Court
Sri.Shirdi Sai Credit vs Sri.P.Krishnaiah on 14 May, 2019
1 CC No.17688 of 2016
IN THE COURT OF THE XXVI ADDL.CHIEF
METROPOLITON MAGISTRATE, BANGALORE CITY
Dated this the 14th day of May 2019
:PRESENT:
SMT.ROOPA K., BAL, LLB.
XXVI Addl.C.M.M., Bangalore City.
JUDGMENT U/S 355 OF Cr.P.C
Case No. : C.C No.17688/2016
Complainant : Sri.Shirdi Sai Credit
Co-operative Ltd. (R),
Rept. by its Secretary,
No.3 and 4, 1st floor,
K.Munegowda Building,
1st Main Road,
Basaveshwara Layout,
Nagashettyhalli,
Bengaluru - 94
(By Sri.Jalandhara - Adv.)
Accused : Sri.P.Krishnaiah,
Assistant Binder,
Government out zone Printing
Press, Mysore Road,
Bengaluru - 560 059
(By Sri.S.P.Govindaraj - Adv.)
Offence complained of : U/s 138 of N.I.Act.
Plea of the accused : Pleaded not guilty.
Final Order : Accused is acquitted.
Date of Order : 14.05.2019.
2 CC No.17688 of 2016
JUDGMENT
The complainant has filed this complaint against the Accused for the offence punishable u/s 138 of Negotiable Instruments Act.
2. The Complainant has stated that the complainant is registered Co-operative Credit Society registered under Karnataka Co-operative Society Act. The accused is the member of the complainant. The accused approached the Complainant society for sanction of loan of Rs.15,000/- on 07.02.2005 for the purpose of improving his business and the same was sanctioned to the accused. The accused agreed to repay the said loan amount in equal monthly installments. After taking the loan the accused has not paid the installments regularly. The Complainant issued demand notices to the accused demanding for repayment of the entire loan with interest. After several demand made by the Complainant the accused issued cheque bearing No. 376798 dated 16.12.2015 for a sum of Rs.48,000/- drawn on State Bank of Mysore, Nagarabhavi Branch, Bangalore. When the said cheque was presented it was dishonoured with 3 CC No.17688 of 2016 endorsement "Funds Insufficient" as per memo dated 08.03.2016. The Complainant has got issued legal notice on 04.04.2016 through RPAD. The notice sent through RPAD was duly served on 05.04.2016. Inspite of it the accused has failed to pay the cheque amount. Hence the complaint.
3. The accused appeared before the court through his counsel and was enlarged on bail. Copies of the papers were furnished to him as required u/s 207 of Cr.P.C. The summons and the substance of the accusation for the offence punishable u/s 138 of Negotiable Instruments Act was read over and explained to the accused. The accused pleaded not guilty and claimed trial.
4. The Complainant society represented by its Secretary by name Shashikalal B.B. has been examined as PW1 and she has produced 6 documents as per Ex-P1 to 6. After closure of Complainant evidence, the statement of accused was dispensed as the accused has not challenged the entire evidence of PW1 in spite of sufficient time given, the accused has not chosen to adduce any defence evidence. 4 CC No.17688 of 2016
5. I have heard the arguments of Complainant sides.
6. On perusal of entire evidence available on record the following points arise for consideration.
1) Whether the Complainant society proves that, the accused to discharge of legally recoverable debt or other liability issued the alleged cheque bearing No. 376798 dated 16.12.2015 for a sum of Rs.48,000/- drawn on State Bank of Mysore, Nagarabhavi Branch, Bangalore. ?
2) Whether the Complainant society proves that, on presentation of said cheque, same was returned unpaid as "Funds insufficient" and despite of giving legal notice, he failed to pay the cheque amount, thereby he committed an offense punishable under section 138 of NI Act ?
3) What order?
7. My findings on the above points are as under:
Point No.1: In the Negative, Point No.2: In the Negative, Point No.3: As per the final order for the following:5 CC No.17688 of 2016
REASONS POINT NO.1 and 2 :
Both points 1 and 2 are taken up together for common discussion to avoid repetition.
8. The Complainant society was represented by its Secretary by name Shashikala B.B. has been examined as PW1 and she has produced 6 documents as per Ex-P1 to P6. PW1 deposed in her evidence that the accused has borrowed loan of Rs.15,000/- on 07.02.2005 for the purpose of improving his business and he has agreed to repay the same in monthly equal installments. But the accused failed to repay the installments. Hence demand notice was issued to the accused demanding for repayment of entire loan due with interest. After several demands the accused issued a cheque bearing No. 376798 dated 16.12.2015 for a sum of Rs.48,000/- drawn on State Bank of Mysore, Nagarabhavi Branch, Bangalore as full and final settlement of loan amount. 6 CC No.17688 of 2016
9. It is pertinent to the mention that alleged cheque was marked at Ex-P2. On presentation of said cheque it was returned as "funds Insufficient " under bankers memo dated 08.03.2016 as per Ex-P3. On 04.04.2016 legal notice was issued and the same was duly served it can be seen from postal acknowledgement Ex-P6.
10. On perusal of Ex-P2 and bankers memo Ex-P3 it clear that on presentation of said cheque it was returned as "funds Insufficient". The Complainant has issued notice through RPAD as required under section 138 (b) & (c) of NI Act. The said notice was duly served, despite the accused failed to comply the cheque amount. Thus, it is clear that the Complainant has complied all the essential ingredients of Section 138 of NI Act to proceed with the case.
11. Admittedly the loan advanced to said accused was on 07.02.2005 and the cheque was issued on 16.12.2015, thus by the time the cheque was issued the debt was barred with limitation, but there was no valid acknowledgement of liability within the period of limitation. As per the decision of Hon'ble 7 CC No.17688 of 2016 Apex Court in A V Murthy vs. B S Nagabasavanna reported in 2002 AIR SCW 694 wherein the Hon'ble Apex Court held that, dismissal of the complaint on threshold that, amount was advancing by the Complainant four years prior, there was legally enforceable debt further held that, in the balance sheet prepared by the Complainant for a every year, he had shown amount as deposits from friend, this was amounting to acknowledgement.
12. But this is not similar to the facts of this case on hand because there is no any acknowledgement on part of the accused with regard to the debt outstanding. The complainant has not produced any acknowledgement of debt executed by the accused admitting his liability within the period of validity.
13. Further, no doubt the cheque is dated 16.12.2015 but the cheque is within time. However it is clear from Section 138 of NI Act, that in order to attract penal provision in the bouncing of cheque under the chapter 17, it is essential that dishonoured cheque should have been issued in 8 CC No.17688 of 2016 discharge, wholly or in part or any debt or any other liability of the drawer to the payee. The explanation to section 138 defines that the expression "debt or any liability as a legally enforceable debt or other liability". The explanation to Section 138 of NI Act reads as under.
Explanation - for the purpose of the Section "debt or other liability" means legally enforceable debt or other liability.
14. In the case on hand the cheque in question was stated to be issued in the year 2015 for the debt of the year 2005 therefore it cannot be said that a time barred debt is legally enforceable. Further, in Criminal Appeal No.545/2010, the Hon'ble High court of Karnataka held in the case of K V Subbareddy vs. N.Raghavaredday that, the time barred debt is not legally enforceable debt. Therefore the alleged cheque issued for repayment of time barred debt does not attract Section 138 of NI Act. Therefore at the outset though the cheque was of the year 2015 but the amount due is of the year 2005 i.e. after lapse of 10 years from the date of advancement of loan, the Complainant claiming the amount, 9 CC No.17688 of 2016 which is not a legally recoverable debt. Therefore the accused is liable to be acquitted from the alleged offence. Just because accused has not cross examined PW1 and not challenged the Complainant itself is not ground to accept the illegality. Hence, I answer point 1 and 2 in the negative. POINT No.3
15. In view of the findings on point No. 1 and 2 the accused is liable to be acquitted for the alleged offence Hence, I proceed to pass the following:
ORDER Acting u/s 255(1) of Cr.P.C., the accused is acquitted for the offence u/s 138 of NI Act The bail bond executed by the accused and surety stands in force till appeal period completed.
(Typed directly on computer to my dictation by the stenographer in the chamber , corrected and then pronounced by me in the open court on this the 14th day of May 2019) (ROOPA K.) XXVIth ACMM, Bangalore.10 CC No.17688 of 2016
ANNEXURE Witnesses examined for the Complainant:
PW1 : Shashikala B B Witness examined for the accused: NIL
List of Documents marked for the Complainant:
Ex. P1 Authorisation letter Ex. P1(a) Bylaw Ex. P2 Cheque Ex. P2(a) Signature of the accused. Ex. P3 Endorsement. Ex. P4 Copy of Legal Notice. Ex. P5 Postal receipt Ex.P6 Postal acknowledgement
List of Documents marked for the accused:
NIL XXVI ACMM, Bangalore.